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Under the Hood of a Fast-Approaching Deadline: How the Corporate Transparency Act will Affect Automotive Businesses

By FileForms | October 13, 2023
Under the Hood of a Fast-Approaching Deadline: How the Corporate Transparency Act will Affect Automotive Businesses

In the fast-paced automotive and auto services industry, enterprises, especially small businesses, often find themselves managing a multitude of tasks. From securing new inventory and ensuring quality auto parts to properly handling customer repairs and maintaining a skilled sales staff, the list of responsibilities seems endless. Whether you own an auto dealership, car wash, or tire shop, there’s a new federal mandate as a result of the Corporate Transparency Act, of which you should be aware: filing a Beneficial Ownership Information (BOI) report. 

This document is a significant initiative by the federal government to enhance commercial transparency by identifying the real individuals behind the ownership and control of certain businesses.

Beneficial ownership refers to individuals or entities that exhibit control or influence over a company, even if that company is legally registered under another name. In a bid to counteract money laundering and terrorist financing, the U.S. Congress rolled out the Corporate Transparency Act (CTA) on January 1, 2021. As a segment of the Anti-Money Laundering Act of 2020, the CTA requires entities to disclose their beneficial ownership details to the Financial Crimes Enforcement Network (FinCEN) beginning January 1, 2024.

Why the Corporate Transparency Act Is Critical for Automotive Businesses 

To the untrained eye, the BOI report may appear as just another administrative task. However, a deeper dive unveils its critical implications for business in the United States, including the automotive sector. Crafted as a robust defense tool, the BOI report is designed to be instrumental in fostering transparency and endorsing legitimate commerce throughout the country. 

The consequences of non-adherence are serious. Businesses that are uninformed or ill-equipped – including small businesses in the automotive and auto services industry – could face severe monetary penalties, jeopardizing their financial stability. The legal ramifications are also profound: individuals accountable for any neglect or intentional non-compliance could have, in addition to substantial fines, incarceration as well. This grim prospect accentuates the gravity of these federal directives and underscores the need for thorough awareness and readiness.

Consequences of Missing the BOI Report Deadline 

The repercussions for non-compliance are stringent. Violating entities could be fined up to $500 daily, capping at $10,000. Willful non-compliance or misinformation could result in criminal charges, with potential prison sentences stretching up to two years.

Limited U.S. Government Communication is Not A Pass

Historically, the U.S. Federal Government’s method of disseminating new mandates and regulations has not been overwhelming. This approach has often left businesses, individuals, and even entire industries blindsided, resulting in confusion and, occasionally, non-compliance. Past mandates like the Medicare Enrollment, Real ID Act, and Immigration and Visa Deadlines stand as evidence of this pattern.

Recognizing this, the U.S. Federal Government has already outlined the requirements for filing a Beneficial Ownership Information report. During the last year, the government has shared details about filing a BOI report on the following platforms:

These platforms provide comprehensive information, guidelines, and resources, ensuring businesses are primed to navigate the compliance terrain.

Understanding the Corporate Transparency Act (CTA) 

The creation of the CTA was a watershed moment in financial transparency and corporate governance. This revolutionary legislation was meticulously designed to bolster transparency, targeting opaque entities like shell companies. Under the CTA’s rigorous guidelines, businesses, termed as reporting companies, are obligated to furnish detailed disclosures about their beneficial owners to FinCEN.

A BOI report should encompass:

  • Legal name
  • Trade names, “doing business as” (d/b/a), or “trading as” (t/a) names
  • Current U.S. street address:
    • Principal place of business for domestic companies
    • U.S. business address for foreign companies
  • Jurisdiction of formation or registration
  • Taxpayer Identification Number

Type of filing:

  • Initial report
  • Correction of a prior report
  • Update to a prior report

Details required for company applicants and individual beneficial owners:

  • Full legal name
  • Date of birth
  • Current address
  • Unique identifying number and its issuing jurisdiction (e.g., U.S. passport or driver license)
  • Image of the document displaying the identifying number

Optionally, filing entities may:

  • Acquire a FinCEN identifier for future filings as an alternative to the above details

FileForms Aids Businesses in Understanding CTA Requirements

Given the potential fines and legal consequences, a passive approach to filing a BOI report spells disaster. The best strategy is to be proactive, informed, and ready.

FileForms emerges as your all-inclusive solution for all business forms and report submissions. Leveraging state-of-the-art technology and expert services, we ensure every client’s filing and reporting requirements are met with precision. We offer invaluable advice and expertise for beneficial owners mandated to submit a BOI report to FinCEN, guaranteeing compliance with all necessary standards. 

FileForms areas of expertise include:

  • Beneficial Ownership Information Reports
  • Foreign Bank Account Reports
  • Foreign Account Tax Compliance Act Reporting
  • Annual Reports and Registered Agent Services

Our approach not only highlights the urgency and significance of accurate filing and reporting but also retains a professional demeanor, underscoring FileForms’ dedication to offering specialized solutions.

As the deadline for the Beneficial Ownership Information report nears, its importance becomes even more evident. This isn’t just a formality; it’s a directive from the U.S. Federal Government. Get started with FileForms today and stay proactive, transparent, and compliant.